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2018 (1) TMI 1408 - AT - Income TaxTransfer pricing adjustment - Freight forwarding and logistics with transacted value wrongly mentioned - selection criteria for comparable or non-comparable - Held that:- The assessee is engaged in rendering freight and forwarding services in domestic and international sectors. It earns its revenue from the customers in India, whose cargos are booked to be delivered by it outside India through its AEs network and it also earns revenue in respect of inbound cargo received from the goods booked by its AEs from outside India, which have to be delivered to the customers in India, thus companies functionally dissimilar with that of assessee need to be deselected from final list. Companies not be excluded for minor variations in the ratio of lease rent to sales and net fixed assets to sales. Also no company can be excluded simply on the basis of a higher or lower profit margin registered in the year relevant to the assessee company. When average of the profit margins of the otherwise functionally comparable companies is taken, the differences due to particular higher or lower profit margins are ironed out. Determining the amount of transfer pricing adjustment by considering the entity level gross revenue shown by the assessee at ₹ 286.89 crore - Held that:- No income arising from non-AE transaction can be computed having regard to its ALP. In fact, price/profit from comparable transactions of the assessee with non- AEs, is one of the subtle and most reliable modes for determining ALP in respect of international transactions. Thus, it boils down that the Act does not contemplate an addition by way of transfer pricing adjustment in respect of transactions with non-AEs. As the authorities below have ventured to make a composite addition, so, that part of the addition which relates to the transactions with non-AEs is untenable and hence cannot be sustained. We, therefore, vacate the impugned orders pro tanto. TDS u/s 195 - disallowance u/s 40 (a)(i) - non deduction of tds by assessee paid administrative fee to EGL, US and EGL Singapore for providing non-technical day-to-day administrative supports functions - Held that:- The Tribunal, while dealing with the similar disallowance for the preceding year held that such an amount paid by the assessee is not chargeable under Article 12 of the DTAA because no services were `made available’ to the assessee by the service providers. A copy of such order has been placed on record. On a pertinent query, the learned DR fairly admitted that the facts and circumstances of the ground for the instant year are mutatis mutandis similar to those of the preceding year - order for deletion of the disallowance. Depreciation on computer peripherals at the reduced rate - assessee claimed depreciation @ 60% on computers and printers etc. - Held that:- This issue of allowing depreciation at higher rate on computer peripherals is no more res integra in view of the judgment of the Hon'ble Delhi High Court in CIT vs. BSES Yamuna Powers Ltd. [2010 (8) TMI 58 - DELHI HIGH COURT]. We, therefore, direct to allow depreciation on the computer printers at the higher rate as claimed by the assessee. As regards the direction of the DRP for suitably adjusting the opening written down value of computer peripherals, we direct the AO to enhance the written down value with the excess amount of depreciation disallowed in the preceding years provided such decision of the AO was accepted by the assessee. Levy of interest u/s 234A - AR contended that the return was filed within the extended time allowed by the CBDT vide order u/s 119 of the Act (F.No.133/38/2006-TPL (Pt.) - Held that:- We direct the AO to verify the assessee’s contention and suitably amend the charging of interest u/s 234A, if warranted.
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